RACGP president Dr Michael Wright says it's often easier to assess the cost of something that's broken, than assess the cost of not letting it happen.
Measuring productivity in health, aged care and disability requires more than counting services delivered, panellists at Tuesday’s Centre for Health Economics Policy Symposium argued.
Consultations, hospital separations, workforce numbers, and expenditure may be relatively easy to measure, but they provide only part of the picture. The more important question is what difference that activity makes to people’s health, wellbeing and quality of life.
Nowhere is this more acute than in the disability sector, Professor Dennis Petrie from Monash University argued.
He said that for disability care, there should be a focus on better lives, more fairly shared within productivity in disability care.
“Prices don’t reflect value in settings. Lots of care isn’t paid for by the people who actually get the care, so activity isn’t productivity, especially when our goal is better and more fairly shared lives,” he said.
Quality is a key reason the disability sector moved from block funding to individualised budgets with the idea that it would improve quality.
“In order to measure that improvement, we have to measure something that’s going to capture that quality and the value that people can place on having people they know or trust come into their homes,” he said.
“The other one is allocative efficiency, so the value of a support to different people is different depending on their circumstances and when they get it. The idea is to try and give the right support to the right people at the right time,” he said.
He said there also needed to be consideration for prevention in the disability space. Not preventing disability altogether, but using universal design to help reduce the need for care in the first place.
“I’m talking about making sure that public transport’s accessible … designing houses and universal design for houses, and also lots of mainstream services.”
The final thing that was often missed in productivity was equity, he said.
“If we have a huge billion-dollar increase in a scheme that’s meant to improve equity, and we think that that’s going to impact on productivity, if we’re just measuring the outputs, then potentially yes.
“But we’re delivering gains for the people who need it the most, compared to others in society,” he said.
To measure those outcomes, he and his team were commissioned by the NDIA to create a Disability Wellbeing Index.
“These are shaped by what matters to people with disability,” he shared.
The index is free to use, is being used by disability organisations across Australia, and has had international attention.
But Professor Petrie admitted that the index is still in its first iteration and doesn’t capture everything. But the goal is to see outcomes on a common scale and help shift productivity from services to wellbeing for people with disabilities.
Measuring productivity across the health system
Australian Bureau of Statistics deputy statistician Philip Gould said health was particularly difficult because much of the sector operated outside conventional markets, making both prices and outcomes difficult to establish.
“Most of our health services when we go to a hospital are likely part of a non-market sector. If you go to a private hospital, it will be part of a market sector, but it will be heavily subsidised by government payments.
“So, it’s really difficult to establish prices, and it’s really, really difficult to ascertain the quality of outcomes,” he explained.
Australia spent more than $270 billion on health in 2023-24, equivalent to around 10.5% of GDP, making understanding the value generated by that investment increasingly important.
But Dr Gould said productivity measures often relied on relatively simple inputs and outputs because the quality of health outcomes was much harder to capture.
“Often when we can’t measure quality of outcomes, we focus on outputs. So in the health setting, that might mean on the separations from hospital. On the input side, it might mean something like… the number of people who are employed in sector,” he said.
The ABS is attempting to address some of those shortcomings and is developing multifactor productivity measures covering both the market and non-market health sectors.
They recently published similar data for the education sector with health data expected to be published in December.
Primary care value also difficult to capture
Royal Australian College of General Practitioners president Dr Michael Wright agreed that limitations of current healthcare productivity measures were also apparent in general practice.
“The challenge we have: we’ve got access outcomes, we’ve got activity outcomes, but we really don’t have any sort of clinical outcomes that might help us understand the effectiveness of what we do, particularly because the care that we provide is over the long term,” he said.
“It’s holistic care rather than disease-focused care. And often, what we’re doing is trying to prevent something from happening.
“Frankly, it’s often easier to assess and cost and fix something that’s broken, rather than to cost what you saved by not letting an event happen,” he said.
He also said that as it’s harder to get research in primary care, it’s even harder to allow GPs to prove that benefit.
Dr Wright said there are ways to reward high-value care, even if measuring the outcomes is difficult.
“The simplest way is to increase or fix the disparity within Medicare payments that means you get paid per minute more for a short consultation versus a long consultation, which is encouraging more rapid care,” he said.
He cited Lumos data that suggested if you see a GP within two days of being discharged from hospital, you reduce your readmission within a week by a third. If you see a GP within a week, you reduce your readmission by 10%.
“Maybe having Medicare items that value those consultations more, recognising that they bring better value to the system is a way forward,” he suggested.
“People who have multimorbidity, increased frailty, increased complexity. There is no system to provide them with greater incentives to get more access to the care that they need,” he continued.
“Continuity of care is a therapeutic thing that we offer in general practice. It’s shown to improve health outcomes, it’s shown to reduce cost, reduce need to use emergency departments, hospitals, and somehow embedding that and encouraging patients to have a preferred provider and see them would be helpful,” Dr Wright suggested.
Is productivity itself the right measure?
ANU researcher Chelsea Hunniset took the argument further, questioning whether productivity should remain one of the dominant measures of economic and social success.
“I wonder about how individual and societal health and wellbeing is impacted by using success metrics based on economic norms, and whether that be productivity, productivity growth, efficiency, cost-benefit analysis, trade-offs, among many other things,” she said.
She said what they know about the “consumptogenic system” is that it seeks to self-perpetuate the commodification of everything it can.
She defined the consumptogenic system as: “The web of institutions, policies, commercial activities, and norms, that incentivise and reward excessive production and consumption of fossil fuel-reliant goods and services that are unhealthy and inequitable valued and distributed”.
“Sure, we have to think about making the system as effective as possible, so that people can access healthcare services and the vital systems that they need.
“But I find it really challenging to accept that it’s the health system that has to become more productive, and not the economic system that needs to be prioritised.
“Getting the measurement right can only occur if it sits within a framework that recognises the needs of the day,” Ms Hunniset said.
She proposed the wellbeing economy as an alternative, moving away from key metrics of success like productivity, growth, development to one that ensures that humans can flourish on a safe planet.
“It does this by using holistic metrics of well-being in success. The way that we evaluate it that is focused on health, environment, and equity instead of metrics focused on economic outputs like productivity, deficit, inflation,” she said.
She agreed that it was a challenging idea.
“The wellbeing economy flies in the face of over 100 years of economic activity, challenging some of the most ingrained assumptions and orthodoxies that society has about what the economy can and cannot do, what money can and cannot achieve, and how well-being can be enhanced,” said Ms Hunniset.
Her research showed her that Treasury would be the government department best positioned to lead on the development of a well-being economy in Australia. However, she also identified institutional constraints particularly prevailing assumptions about growth, and the fact that politicians ultimately made the big decisions.
“The water’s edge of decision making is a limitation for Treasury. Ultimately, in our system, it’s the politicians who make the decisions,” she said.
She finished the discussion with a final thought: “What we measure really matters. So measuring what is meaningful to people should always be the priority when we’re having this discussion.”
